Question

Photographic​ Supplies, Inc.'s accounting records include the following for ​2016:

Income Tax-Saving Extraordinary Loss $8,000 Sales 575,000
Income Tax-Saving_Loss on Operating expense
(Including Income Tax) 100,000
Discontinued Expense 9,600
Extraordinary Loss 20,000 Cost of Goods Sold 245,000
Loss on Discontinued Operations 24,000
Required:
Prepare Click's multi-step income statement for 2016. Omit earnings per share.

Answer 1

Answer and Explanation:

The preparation of the multi-step income statement for the year is presented below:

Photographic Supplies, Inc.

Income statement

Year Ended December 31, 2016

Sales revenue $575,000

Less: Cost of goods sold -$245,000

Gross profit $330,000

Less: Operating expenses -$100,000

Income from continuing operations $230,000

Less: Loss on discontinued operations -$24,000

Discontinued expenses $9,600

Income before extraordinary item $215,600

Less: Extraordinary loss -$20,000

income tax savings $8,000

Net income $203,600